Rural Employment and Labour Livelihood in Bihar: Village Level Analysis

Abstract

The study analyses the changing employment and livelihood pattern of labor households during the last four years using panel data. The labor households are those who earned more than fifty per cent income through wage earning in farm and non-farm sectors. There is decline in proportion of labor households but clear evidence of transition of labor force has been observed from farm to non-farm sector during last four years. Some of the self-employed households in the agricultural sector moved towards the labor force, indicating a rise in the number of land owning labor households.Literacy level of laborers showed increasing trend but about one–third woman laborers are still illiterate in Bihar. There is no cast bar in joining the labor force. Asset poverty is very high and the incidence of livestock possession also declined continuously which was due to increase in fodder price, division of family, un-renumerative price of milk, introduction of tractor for ploughing. Labor households' access to toilet increased but about three-fourth of them still do not have toilet in the area under study. There was increase in employment for male in both farm and non-farm sector but increase was higher in non-farm sector than farm sector. Women employment in farm sector declined from 69 days in 2010 to 41 days in 2013 whereas there was an increase their employment in non-farm sector. The transition of labor force from farm to non-farm sector has been fast during last four years. The role of non–farm sector in providing rural employment has increased and strategy to increase non-farm employment may be one of potential pathways for alleviating poverty in Bihar. Some of the labor employed in farm sector and self-employed households in the agricultural sector moved towards the non-farm sector for employment. The trend in real wage rate showed that non-farm wage has grown faster than the farm wage. We observed that wage employment in general is superior to self-employment on very small size of farms in rural areas. Both farm and non–farm sectors witnessed increase in wages of labors during last four years but the increase was much higher in non-farm sector (65%) than farm sector (15%).Male laborers were employed on higher wages than women laborers in both farm and non-farm sectors in villages under study. Wages in farm sector in not only low but it does not provide regular employment whereas wages in non–farm is higher and employment is more regular. Wage determinant analysis revealed that a healthy, educated and land owning adult male laborer is likely to get higher wages whereas the caste of labor is not a significant factor for payment of wages in rural Bihar. Non-farm sector emerged as a major source for providing employment and generating income on labor households. Income through farming constituted about 8 to 12 per cent of total income on labor households but it fluctuates from year to year because farming is still dependent on extent of rainfall. Remittances emerged as the second most important source of income on labor households because migration for gainful employment is one of the important strategies for maintaining in Bihar, particularly on poor households. Analysis of income of poor and non-poor labor households indicates declining trend in income through wages through non–farm on poor labor households but it observed increasing trend on non-poor labor households, indicating positive effect of non-farm employment in increasing income and alleviating poverty on labor households. Income through employment in agriculture sector is declining but agricultural is still likely to be a key driver of growth even in the non-agricultural economy through linkages. Policies to extend systematic skill and training opportunities will help better opportunities of employment for migrants and non-farm workers which will help reducing poverty and improving livelihood of labor households in rural Bihar.Institutional credit flow is lower in Bihar and Agricultural labor households have much less access to institutional sources of credit. They depend on non–institutional credit sources for meeting their credit need. About one-third of labor households borrowed mainly meeting expenses of consumption credit including for meeting expenses of treatment of their family members.Various programs for welfare and development of the weaker section are implemented by different departments of government. But labor households have more access to social security schemes and project targeted to poor households (BPL families) than program launched for benefits of bot poor and non-poor households. However, programs like, MANREGAS, IAY, KCC and SHG have almost seized to operate in villages under study. Hence, there is need to revive these projects with more focus to the weaker section of society for the benefit of labor households.